In Thomas v. Montelucia Villas, the Arizona Supreme Court remanded back to the trial court a case where the trial court had ruled that a contractor was entitled to retain progress payments on the purchase of a new home by Thomas, because Thomas had anticipatorily breached the purchase agreement by sending a letter demanding return of their payments.  Thomas had made installment payments totaling over $600,000.00 towards a purchase price of just over $3 million for a luxury condo.  The agreement recited that the builder could use the payments to pay for the on-going construction.  As the time for closing approached, Montelucia did not have a certificate of occupancy.  Thomas sued to recover his payments and the trial court agreed. The Court of Appeals reversed, finding Thomas had breached the contract by demanding his payments back, prior to closing, the date by which the certificate of occupancy had to be in-hand.  The Arizona Supreme Court noted that Thomas had not challenged the Court of Appeals ruling that he had anticipatorily breached, but also noted that while an anticipatory breach excuses performance by the other party, it, alone, does not justify an award of damages.  The Court of Appeals had ruled that a Plaintiff seeking damages for anticipatory breach would have to prove that he could have performed, but that a Defendant who was merely seeking to retain monies paid as liquidated damages, would not have to prove its ability to perform.  The Arizona Supreme Court disagreed.  The Supreme Court concluded the payments were not earnest money subject to forfeiture because they were used to fund the construction and were not simply good faith funds.  The Supreme Court sent the case back and required Montelucia to prove its ability to perform.